The Centers for Medicare and Medicaid Services (CMS) has released two important Medicaid guidance documents.

The first, released on November 2, 2017, is a Center for Medicaid and CHIP Services (CMCS) informational bulletin that focuses on the delivery system and provider payment initiative provisions in the Medicaid managed care rule released in May 2016. 81 Fed. Reg. 27498 (May 6, 2016). This rule announced a general prohibition on states’ ability to direct managed care organizations (MCOs) to make payments to certain targeted providers, with specified exceptions. 42 CFR §438.6(c). The November 2 informational bulletin provides more information about the specified exceptions for value-based purchasing models; multi-payer and Medicaid-specific delivery system reforms and performance improvement initiatives; and provider payment parameters, including minimum fee schedules, uniform dollar and percentage increases and maximum fee schedules. The CMCS bulletin also provides examples of approvable arrangements under each of the categories of exceptions. In addition, CMCS notes that the general prohibition is not applicable to situations where a state does not specifically direct how the MCOs must contract. As stated in the bulletin, payment arrangements would not require CMS approval if the “state is not mandating a specific payment methodology or amounts and managed care plans retain the discretion for the amount, timing, and mechanism for making such provider payments.”

The second Medicaid-related release, on November 3, 2017, announces final Medicaid disproportionate share hospital (DSH) allotments for federal fiscal year 2015 and preliminary DSH allotments for FY 2017. 82 Fed. Reg. 51259 (Nov. 3, 2017). These allotment notices are important to states because they indicate how much the state can pay in Medicaid DSH payments in any given year. Note that CMS did not apply any DSH allotment reductions mandated under current law, since those allotment reductions do not begin until FY 2018. However, on July 28, 2017, CMS issued a proposed rule about those allotments, 82 Fed. Reg. 35133, and a final rule is expected soon, as FY 2018 began on October 1, 2017. It is possible that legislative efforts will delay implementation of the DSH allotment reductions.